Sept. 4 (Bloomberg) -- Saudi Arabia, the world’s biggest
crude exporter, risks becoming an oil importer in the next 20
years, according to Citigroup Inc.

Oil and its derivatives are used for about half of the
kingdom’s electricity production, which at peak rates is growing
at about 8 percent a year, the bank said today in a an e-mailed
report. A quarter of the country’s fuel production is used
domestically, more per capita than other industrialized nations,
as the cost is subsidized, according to the note.

“If Saudi Arabian oil consumption grows in line with peak
power demand, the country could be a net oil importer by 2030,”
Heidy Rehman, an analyst at the bank, wrote. The country already
consumes all its natural-gas production and plans to develop
nuclear power, which pose execution risk amid a lack of
available experts, safety issues and cost overruns, Rehman said.

Saudi Arabia, which depends on oil for 86 percent of its
annual revenue, is accelerating exploration for gas and is
planning to develop solar and nuclear power to preserve more of
its valuable crude for export. The kingdom has refused to import
gas, unlike neighboring producers such as Kuwait, and the United
Arab Emirates that also lack fuel for power generation.

Young Population

Saudi Arabia’s per capita consumption in 2011 is higher
than most industrialized nations, including the U.S., according
to the report. The nation’s 10-year historical consumption
compound annual growth rate may increase 6 percent, double its
projected population growth, Rehman wrote. Saudi Arabia’s
population was 28 million as of the end of 2011, International
Monetary Fund data compiled by Bloomberg show.

“Indeed we would expect consumption to continue to
outstrip population growth as Saudi Arabia’s currently young
population ages and consumer spending increases supported by
rising GDP per capita,” Rehman wrote.

The IMF forecasts a 10 percent rise in gross domestic
product per capita this year to $22,635 and may climb to $23,936
by the end of 2017, the data show. Saudi Arabia’s $600 billion
economy, the largest in the Arab world, may expand 5 percent
this year, according to the median estimate of 12 economists
surveyed by Bloomberg.

The country produced 11.2 million barrels a day of oil and
natural-gas-liquids last year, 13 percent of the world’s supply
and more than any other nation, according to BP Plc’s
statistical review. It was the eighth-largest gas producer,
providing 9.6 billion cubic feet a day to the domestic market,
according to the report.

Saudi Arabian power providers pay $5 to $15 a barrel for
its fuel from state-owned Saudi Arabian Oil Co., according to
the report. Brent crude, the benchmark for more than half the
world’s oil, traded at $116 a barrel today on the London-based
ICE Futures Europe Exchange.

“As a result of its subsidies we calculate ‘lost’ oil and
gas revenues to Saudi Arabia in 2011 to be over $80 billion,”
Rehman wrote. “At the domestic level, we believe the only real
way to rationalize energy consumption would be to reduce subsidy
levels.”